Developer Michael Yates reveals shrewd deals in South Yarra

Marc Pallisco

When shrewd developer Michael Yates last month unveiled two South Yarra buildings he had recently received ministerial approval to develop, he was quietly formalising a plan to sell the project to a Chinese developer.

In an off-market deal, Yates is speculated to be banking around $30 million from the sale of 663 Chapel Street – an approximate 2100 square metre portion of a 3537 sq m block he bought for $19 million in 2011, a particularly depressed time in Melbourne's development site sector.

Yates bought the property from owner-occupier CR Kennedy 11 months after a $25 million sale to another developer had fallen through.

Eight months ago, Yates lobbied Planning Minister Matthew Guy to replace part of the site with 321 units in two buildings – the tallest rising 29 storeys. The South Yarra stalwart will develop an education academy on another part of the block he sold at cost price to the Melbourne High School Foundation.

Four years ago Yates made headlines when he bought an apartment within a low-rise complex at 19 Yarra Street – a purchase which gave him rights to block other owners developing or selling airspace in future. Yates was proposing an apartment building next door and wanted to price in view security that occupants would enjoy over 19 Yarra's rooftop.

Up by the West Gate

The owners of a development site abutting the West Gate Freeway have reapplied to Mr Guy to make an approved project bigger.

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It is now hoped 57 Haig Street will make way for a 52-level building, which is up 13 levels on an earlier proposal. The new complex would include 248 flats and 171 car-park bays and a small commercial area. It is one of several new skyscrapers earmarked for sites abutting the West Gate at Southbank.

Offered for the first time in 60 years, the 1241 sq m block at 997-1003 Whitehorse Road is expected to make way for a medium-density, mixed-use complex with ground floor commercial and upper level flats. The site is near the Box Hill train station about 14 kilometres east of town.

It's hard to miss Box Hill from most eastern suburbs - with the Australian Taxation Office building, currently under construction and set to rise 19 levels, already dominating the skyline from several kilometres away. A 35-level residential building has also been approved in the area.

Gorman Commercial's Stephen Gorman and Stephen Speck declined to comment about any part of the Budget property, which sold before a scheduled auction.

Choice for Chirnside

An offshore investor has paid $7.2 million for an as yet unbuilt retail complex in Chirnside Park. The 30 Old Melbourne Road asset is the first of a six-stage site redevelopment. It has been leased to the Coles liquor chain First Choice and a chemist.

Shady dealings

While history might reveal 2014 as a period in Melbourne planning when high-density was centralised to the CBD area – it has also had its fair share of permit approvals that have defied what were once restrictive shade protections.

The City of Melbourne council is behind one of the latest approvals - a 33-level residential building on a site adjacent to the gardens of the State Library of Victoria.

The proposed tower will be the tallest in the immediate vicinity and replace a 1926 low-rise building that for years was part-leased to Hungry Jacks. The 615 sq m site sold to an offshore developer in 2010. It is known as both 188–196 La Trobe Street and 389 Swanston Street.

In the past few months Mr Guy has received several applications for skyscrapers that would cast a shadow over the Yarra River's north bank.

The Spaghetti question

Dining institution The Spaghetti Tree can celebrate its 26th year in peace at 59-63 Bourke Street - but if it renews a four-year option in 2015 it may find itself amid a construction zone.

That's the message from the new landlord - high-rise builder AXF Group - which has quietly paid $8 million for the four-level building on a 500 square metre block – and is now said to want the restaurant out so as to redevelop the space.

The Italian eatery and other tenants, including Madame Brussels and Japanese karaoke bar Asuka, have leases at 59-63 Bourke Street with options expiring at various stages up to 2019.

In response to questions about whether it will wait until 2019 to develop, AXF Group only said it "won't start the [59-63 Bourke Street] project next year".

"The project" that AXF is planning is unknown. The developer's Melbourne head office is built into airspace of an older (cinema) building - and was acquired because it had further airspace redevelopment potential.

The Spaghetti Tree manager responded to questions about whether it will renew until 2019, saying, "It is up to the new owners to decide when we leave."

"We don't know what's going on; all we want to say is the building sold with a long lease and the business is not closing down."

Local industry sources say the burgeoning AXF Group would consider building around tenants, if Spaghetti Tree decided to stay.